Undoing the Wasteful Incentives of the Energy World, Giving Innovators a Shot: A Talk With State Energy Secretary Ian Bowles

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In a state that prides itself on leadership in tomorrow’s energy technologies, Ian Bowles is the point man. He’s Secretary of Massachusetts’ Executive Office of Energy and Environmental Affairs, a new position created under Gov. Deval Patrick to oversee a hodgepodge of state agencies controlling everything from utility regulation to agriculture to the state’s parks and conservation lands. He’s a seemingly ubiquitous presence at energy-related events and forums around the state, frequently speaking on regulatory reform, energy efficiency, and programs to expand the use of wind and solar power. Those are issues close to the hearts of our readers in the cleantech sector—so when Bowles invited me to his office for an interview earlier this month, I jumped at the chance.

Bowles has a long history in politics and environmentalism. The Harvard grad started out as a legislative aide on Capitol Hill, and ran (unsuccessfully) for the Democratic nomination in Massachusetts’ 10th Congressional District in 1996. During the final three years of the Clinton Administration, he was senior director of environmental affairs for the National Security Council, and went on to direct policy research at Conservation International, a non-profit dedicated to biodiversity protection. His last gig before becoming Massachusetts’ top energy and environmental official was as president and CEO of MassINC, a Boston-based think tank dedicated to advancing middle-class prosperity and civic life, and publisher of CommonWealth, MassINC’s house magazine.

Most of my questions for Bowles focused on a different kind of environment—the environment for clean-energy entrepreneurs in Massachusetts. While there’s obviously plenty of energy innovation in the Bay State, it’s not necessarily the easiest place to translate that innovation into real change, given the mish-mash of regulatory and legal hurdles facing startups with dreams of building pilot facilities. As Bowles himself pointed out during our interview, for example, three of the largest wind-farm facilities proposed for the state have all been snarled in litigation for years.

So I wanted to know what the Patrick Administration and the state legislature have been doing to try to smooth the way for innovators. (Quite a bit, actually, beginning with basic changes in utility regulations affecting the way the state’s electric and gas companies earn revenue and the incentives they have to invest in new technologies.) I also asked him about the heat the administration has been taking lately over perceptions that the state is losing solar manufacturing jobs to China and biofuels and battery manufacturing jobs to facilities in Michigan.

Speaking of batteries, my laptop battery died moments before my interview with Bowles ended, so I wasn’t able to record his response to my last question, which was about why budding energy entrepreneurs should consider building their companies in Massachusetts. But his answer was a distillation of the themes that ran through the interview: No matter what its downsides (e.g. litigiousness, zoning restrictions, foot-dragging utilities) the Boston area still has one of the world’s highest concentrations of great universities, especially MIT, churning out talented and ambitious young engineers; venture investors who understand the energy and cleantech industries; an innovation-friendly governor and state bureaucracy; and generally progressive regulatory policies when it comes to building markets for alternative energy sources.

Here’s an edited version of the parts of the interview that I was able to capture.

Xconomy: At a high level, how would you describe the biggest changes that you’ve been trying to push through in the way the energy business works in the state?

Ian Bowles: One of the big differences between energy and IT or life sciences is that energy is such a heavily regulated part of our economy. Much of the regulation is at the state level. Federal regulation is pretty limited, but you have 50 state public utility commissions and departments of environmental protection. What we’ve been trying to do is clear away some of the barriers and make the entire system work better, with the goals of bringing new clean energy technologies to market, creating bigger markets for existing technologies, reducing greenhouse gas emissions, and … Next Page »